Inside sales - pay, commission, bonuses?

Question

I work in the agricultural industry and have generated YTD sales of around $1M. I make an hourly wage of $20/hour and work 45-50 hours/week. I have medical, dental, 401K.

This company is fairly young and has never had an inside team before. I would like to ask for commission and/or performance bonuses at my review, but am not sure about how to set up a suggested compensation plan.

How do other industries compensate their inside sales teams?

Answer 1

I worked inside sales for an electronics distributer (chips, fans and other parts used to make computer hardware).

I got a salary and similar benefits to yours. The salary was in the $20-$30K/year range (I don't remember the exact amount).

The commission was based on revenue x a margin multiplier. Basically there was a bare minimum price I could sell something for, if I sold it for that I got no commission. If I sold for a higher amount I got a multiplier against the revenue. The greater the price over the minimum the larger the multiplier got. Say the minimum price on something was $10. I sold it for $12. I could get .01 x $12 = $0.12 commission. If I sold it for $13 I could get .015 x $13 = $0.20 commission. Basically that is how it worked. The more I got for something, the better my commission check got. Also explains why sales reps give good deals towards the end of a month/quarter. They need to hit a quota, so they start giving stuff away to hit it.

I'm not in sales now, but the company I work for has a quarterly quota that must be hit. Once the quota is hit, the multipliers start increasing for sales beyond the quota. This can backfire because if you have a diverse product set the sales reps will sell what they are comfortable with in order to hit quota. We had to push for a higher multiplier on certain "hard sell" products in order to get them out of their comfort zone. It allows them to retire quota faster.